Washington Update Let’s Make a Deal: Appropriations and Other Policy Issues

Introduction

Nothing is done simply or quickly in Washington. It has become even more difficult since January. Nor will it get any easier over the next four years.

During his campaign and inauguration speech President Trump made numerous promises about what would be enacted during his first 100 days in office. Implementing these promises has come more in the form of executive orders than successful legislation. In fact, several of the executive orders have been challenged in court and overturned, except for one. One legislative exception was the confirmation of a new Supreme Court justice.

Two of the promises — funding "the wall" and the repeal of the Affordable Care Act, a.k.a. Obamacare — did not come to fruition during the first 100 days, although Trump tried. He says he will reintroduce the request to fund "the wall" in September.

The repeal of the Affordable Care Act is now in the hands of the Senate. The House passed its version — American Health Care Act — by a vote of 217-213. It squeaked through by two votes. The biggest point of contention is pre-existing medical conditions.

After a back-and-forth, the only way the bill passed the House was with Rep. Fred Upton's amendment to including funding for pre-existing conditions.

Even though the Congressional Budget Office has yet to score the most recent version of the healthcare bill, the House voted on it. The legislation will face a steep climb in the Senate, where widespread disagreement remains among Republicans about how to proceed on healthcare.

Another high priority for the Administration is tax reform. The House Committee on Ways and Means is initially considering the president's proposal and it will provide a budget recommendation to the House.

Appropriations

The federal budget process is very complicated. To better understand the steps it takes as it winds through Congress, the link provides a schematic guide and explanation: www.politico.com

This year there are two parts to fund the government. First is finalizing an appropriation for FY 2017, which began back on October 1, 2016. An initial one-week Continuing Resolution (CR) was passed by Congress on April 28 and expires on May 5.

Congressional negotiators concluded a bipartisan deal late on Sunday evening, April 30. It is an Omnibus Appropriation bill entitled The Consolidated Appropriation Act, 2017. It will fund the government through September 30, 2017. It passed the House on May 3 and the Senate on May 4. Now the president needs to sign it.

The $1 trillion budget deal increases defense spending by $25 billion over current levels and provide $1.5 billion in new border security spending, although it doesn't include funding for President Donald Trump's requested border wall.

House Appropriations Committee has summaries of each section. Education funding can be found in Section H: appropriations.house.gov

You will find a summary of education and related agency funding in the next section.

Second is finalizing appropriations for FY 2018 that begins on October 1, 2017. Hill staff has begun this work. As I stated in the last piece, the President's Budget Blueprint for FY 2018 was dead on arrival. His proposed cuts went too deep for many members to stomach, because they would adversely affect individual members' constituents, communities and states. This feeling runs across party lines and political positions.

There is no question that the fight this fall over spending will be much tougher. A few reasons are the Trump factor, the wall, the debt ceiling, tax reform and bolstering defense. If recent appropriations history is an indicator, no final budget government-wide budget will be passed by Congress and signed by the president before the beginning of FY 2018.

So how will it be addressed and keep the government open? Another CR, or what? How will tax reform, if passed, affect the appropriations process given revenues will most likely be reduced if tax reform is enacted? Possibly a few agencies will get funding, like Defense, but not very many. And the president has stated that a shutdown might be good for the government.

There is great interest in seeing what will be negotiable, what horse-trading will take place, what deals will be cut and which programs and agencies will be the winners and losers. Some results of the FY 2017 education horse-trading follows.

Highlights of the Education and Related Funding in the Consolidated Appropriations Act, 2017

Lawmakers appear to be sending early signals of independence to the Trump administration on education budget issues.

ESSATitle I spending rises by $100 million, up to $15.5 billion from fiscal 2016 to fiscal 2017, along with $450 million in new money that was already slated to be shifted over from the now-defunct School Improvement Grants program.

State grants for special education increase by $90 million, up to $12 billion. However, Title II grants for teacher development would be cut by $294 million, down to about $2.1 billion for the rest of fiscal 2017.

The bill provides $400 million for the Student Support and Academic Enrichment Grant program, also known as Title IV of the Every Student Succeeds Act.

Programs designed to serve needy students like TRIO and GEAR UP get small increases of $50 and $17 million respectively.

The $400 million in funding in the bill for ESSA Title IV is a lot less than the $1.6 billion envisioned under that Act. To make sure that the grants will still be useful to districts, the bill allows states to distribute them competitively. At least 20 percent of the funding must be spent on activities that would help students become safer and healthier, and at least 20 percent would be used for activities aimed at helping children become more well-rounded, such as arts education.

Impact Aid, which provides federal funding for school districts that contain large sections of federal land, will see a $23 million increase.

The budget deal doesn't include a new federal school choice program, a top K–12 priority for the Trump administration, although Trump's request for such a program appears in his fiscal 2018 proposal but not his fiscal 2017 blueprint. In a shift from ESSA, districts that choose to spend the Title IV money on technology could dedicate up to 25 percent to technology infrastructure. (That's up from 15 percent in the original law.)

Expansion of Pell Grant eligibility to include low-income students attending classes all year. Senate Democrats and Republicans last summer struck an agreement to revive year-round Pell eligibility, often called "summer Pell." However, the idea hit a roadblock in the House, where Republican appropriators last year opposed restoring the benefit, citing its costs. House Speaker Paul Ryan said he favored restoring year-round Pell, as did Education Secretary Betsy DeVos.

The bill cuts $1.3 billion from excess funding in the Pell Grant program. Because of mandatory funding increases, the maximum Pell Grant award will increase $105 to $5,920 for the 2017-2018 school year.

This appropriation requires the Education Department to allow all federal student loan borrowers who are consolidating their loans to have a choice in which company collects and processes their monthly payments. "This will allow borrowers to stay with their existing servicer if they wish to limit unnecessary disruption for borrowers, and provide another incentive for servicers to provide high-quality service to borrowers," reads the explanatory statement from Congressional appropriators.

Also, the budget deal includes a $2 billion boost in funding for the National Institutes of Health; National Science Foundation would see an $8.7 million increase; and the National Endowment for the Arts and National Endowment for the Humanities would each receive $2 million more in funding than the 2016 fiscal year.

There are cuts: The Institute of Education Sciences has its funding reduced by $12.7 million under the bill; and funding for graduate students declines by $1.1 million.

The bill reauthorizes the DC school voucher program under the Scholarships for Opportunity and Results Act through 2019. It provides $45 million for the program — the same level as the previous fiscal year.

Some other numbers from the budget deal:

The Education Department's Office for Civil Rights gets a small increase of $1.5 million, up to $109 million.

Pell Grants are flat-funded at $22.5 billion.

Head Start programs, which are administered by the Department of Health and Human Services, get an $85 million increase to $9.3 billion.

Education Innovation and Research fund is cut $20 million, to $100 million.

There are no education policy riders. Democrats fended off Republican efforts to include a provision in the bill to block the Obama-era regulations governing "gainful employment," state authorization and the definition of a credit hour.

Total U.S. Department of Education spending, including both discretionary and mandatory spending covering K–12 and other programs falls by $60 million down to $71.6 billion.

Changes in environmental, use of federal land, and national park and monument policies, practices and programs

Net neutrality and other FCC policies that affect education, telecommunications, use and access to technology and the Internet

Addressing the debt ceiling before its due date

Conclusion

To one's surprise a bipartisan deal was cut and passed. The surprise was it came early enough to be enacted before the May 5 deadline.

Don't get too excited. Winds of change (more bipartisan efforts) are not blowing very strong after this deal. One can only wish for it. Neither side wanted a government shutdown. The next tests will be Congressional action in the Senate on Obamacare, tax reform, funding of the wall and the FY 2018 funding.

As Congress considers other legislation, it should become more interesting. We will see how much the bills reflect President Trump's priorities and wishes.

Until the next update…

This article originally appeared in the June 2017 issue of School Planning & Management.